Question 1

College graduates are paid more, on average, partly because the act of finishing college signals that they are more likely to be a good employee.

Accepted Answer

A) True 
 B)False

Question 2

When customers drive discrimination, owners:

Accepted Answer

A)  who seek to maximize profit are still inclined to hire undervalued, victimized workers. 
B)  who seek to maximize profit are inclined to hire overvalued, victimized workers. 
C)  are not always so keen to hire undervalued, victimized workers. 
D)  are always keen to hire undervalued, victimized workers. 
A)  who seek to maximize profit are still inclined to hire undervalued, victimized workers. 
B)  who seek to maximize profit are inclined to hire overvalued, victimized workers. 
C)  are not always so keen to hire undervalued, victimized workers. 
D)  are always keen to hire undervalued, victimized workers.

Question 3

The average wage for women in the United States is notably lower than for men. Some have argued this is evidence of sexism (How Bad Is Labor Market Discrimination, or Can Lakisha Catch a Break?) on the part of employers. Which of the following points (assuming they are true) would NOT diminish the discrimination explanation for lower wages?

Accepted Answer

A)  Men are less likely to quit their job to care for their kids. 
B)  Women can get pregnant, resulting several weeks or months of missing work. 
C)  Women tend to have less pleasant jobs than men. 
D)  Men are more likely to pursue careers in the hard sciences. 
A)  Men are less likely to quit their job to care for their kids. 
B)  Women can get pregnant, resulting several weeks or months of missing work. 
C)  Women tend to have less pleasant jobs than men. 
D)  Men are more likely to pursue careers in the hard sciences.

Question 4

In which situation are you most likely to find discrimination?

Accepted Answer

A)  a formal environment with repeated interactions 
B)  a casual environment with no repeat interactions 
C)  in the workplace 
D)  among friends 
A)  a formal environment with repeated interactions 
B)  a casual environment with no repeat interactions 
C)  in the workplace 
D)  among friends

Question 5

Economic theory suggests that college graduates receive higher wages than those with only a high school education because:

Accepted Answer

A)  college graduates tend to unionize. 
B)  the supply of high school graduates is relatively small compared with the supply of college graduates. 
C)  college graduates must be paid higher wages to help them pay off their college expenses. 
D)  college graduates are more productive. 
A)  college graduates tend to unionize. 
B)  the supply of high school graduates is relatively small compared with the supply of college graduates. 
C)  college graduates must be paid higher wages to help them pay off their college expenses. 
D)  college graduates are more productive.

Question 6

Is there an incentive for businesses to make jobs safer for workers?

Accepted Answer

A)  No. It costs money to make safety improvements, which lowers profits. 
B)  Yes, but only if the government levies fines and penalties against businesses for unsafe working conditions. 
C)  No, because injured workers receive workers compensation or disability insurance, which is paid by the state or federal government. 
D)  Yes. When firms make jobs safer, they can pay lower wages. 
A)  No. It costs money to make safety improvements, which lowers profits. 
B)  Yes, but only if the government levies fines and penalties against businesses for unsafe working conditions. 
C)  No, because injured workers receive workers compensation or disability insurance, which is paid by the state or federal government. 
D)  Yes. When firms make jobs safer, they can pay lower wages.

Question 7

Some workers might prefer less safety and more pay than more safety and less pay.

Accepted Answer

A) True 
 B)False

Question 8

The marginal product of labor is:

Accepted Answer

A)  the additional output produced by an extra worker. 
B)  the increase in costs borne by the firm when one extra worker is hired. 
C)  always greater than the wage earned by one additional worker. 
D)  the increase in firm revenue when an additional worker is employed. 
A)  the additional output produced by an extra worker. 
B)  the increase in costs borne by the firm when one extra worker is hired. 
C)  always greater than the wage earned by one additional worker. 
D)  the increase in firm revenue when an additional worker is employed.

Question 9

An individual's labor supply curve might be backward bending.

Accepted Answer

A) True 
 B)False

Question 10

Discrimination by employers:

Accepted Answer

A)  tends to break down quickly because employers are always looking to hire the most productive workers at the lowest wages in order to maximize profits. 
B)  tends to break down slowly because employers have many other options when hiring workers that will still maximize profits. 
C)  results in higher wages. 
D)  is the worst kind of discrimination for minorities, as employers are able to restrict employment in these underrepresented groups the most. 
A)  tends to break down quickly because employers are always looking to hire the most productive workers at the lowest wages in order to maximize profits. 
B)  tends to break down slowly because employers have many other options when hiring workers that will still maximize profits. 
C)  results in higher wages. 
D)  is the worst kind of discrimination for minorities, as employers are able to restrict employment in these underrepresented groups the most.

Question 11

A firefighter is likely to earn ________ than a receptionist because ________.

Accepted Answer

A)  more; the job is more fun. 
B)  more; the job is more prestigious. 
C)  more; the job is more dangerous. 
D)  less; the job has unattractive characteristics. 
A)  more; the job is more fun. 
B)  more; the job is more prestigious. 
C)  more; the job is more dangerous. 
D)  less; the job has unattractive characteristics.

Question 12

Music is a relatively enjoyable profession, a factor that raises the wage for musicians.

Accepted Answer

A) True 
 B)False

Question 13

The demand for plumbers is the same in country A and country B, but the plumbers in country A earn less than the plumbers in country B. What can explain this difference?

Accepted Answer

A)  The economy of country A is more productive than the economy of country B. 
B)  The economy of country B is more productive than the economy of country A. 
C)  The supply of plumbers is greater in country A than country B. 
D)  The supply of plumbers is greater in country B than country A. 
A)  The economy of country A is more productive than the economy of country B. 
B)  The economy of country B is more productive than the economy of country A. 
C)  The supply of plumbers is greater in country A than country B. 
D)  The supply of plumbers is greater in country B than country A.

Question 14

A firm will hire a worker whenever that worker's marginal product of labor is:

Accepted Answer

A)  greater than the marginal product of labor for the next best worker. 
B)  less than the marginal product of labor for the next best worker. 
C)  greater than the worker's wage. 
D)  less than the worker's wage. 
A)  greater than the marginal product of labor for the next best worker. 
B)  less than the marginal product of labor for the next best worker. 
C)  greater than the worker's wage. 
D)  less than the worker's wage.

Question 15

Which of the following is an example of discrimination?

Accepted Answer

A)  David shops around to find the lowest price on an item he is looking to purchase. 
B)  Bob does not play poker in Las Vegas because he thinks the odds are against him. 
C)  Mary makes a marketing decision based on past sales data. 
D)  You assume your next-door neighbor Louise is a slow driver because she is 89 years old. 
A)  David shops around to find the lowest price on an item he is looking to purchase. 
B)  Bob does not play poker in Las Vegas because he thinks the odds are against him. 
C)  Mary makes a marketing decision based on past sales data. 
D)  You assume your next-door neighbor Louise is a slow driver because she is 89 years old.

Question 16

If a business is greedy for profits, it is logically consistent for that business to also racially discriminate based on personal preference it might have.

Accepted Answer

A) True 
 B)False

Question 17

One reason office cleaners in India earn less than office cleaners in the United States NOT because:

Accepted Answer

A)  American office cleaners work harder than Indian office cleaners. 
B)  American office cleaners possess higher education levels than Indian office cleaners do. 
C)  the American economy is more productive than the Indian economy. 
D)  the Indian economy is more productive than the U.S. economy. 
A)  American office cleaners work harder than Indian office cleaners. 
B)  American office cleaners possess higher education levels than Indian office cleaners do. 
C)  the American economy is more productive than the Indian economy. 
D)  the Indian economy is more productive than the U.S. economy.

Question 18

What is NOT a reason why are jobs safer today than they were some decades ago?

Accepted Answer

A)  Workers are wealthier and less willing to take on risk. 
B)  The laws enforced by OSHA (Occupational Safety and Health Administration) have made jobs safer. 
C)  Market competition has ensured that firms have installed safety procedures. 
D)  Jobs are not safer than they were decades ago. 
A)  Workers are wealthier and less willing to take on risk. 
B)  The laws enforced by OSHA (Occupational Safety and Health Administration) have made jobs safer. 
C)  Market competition has ensured that firms have installed safety procedures. 
D)  Jobs are not safer than they were decades ago.

Question 19

The introduction of fun into a job ______ labor ______.

Accepted Answer

A)  increases; demand 
B)  increases; supply 
C)  decreases; demand 
D)  decreases; supply 
A)  increases; demand 
B)  increases; supply 
C)  decreases; demand 
D)  decreases; supply

Question 20

Decreasing the marginal product of a firm's labor results in less labor being hired, all other things being equal.

Accepted Answer

A) True 
 B)False

Exam 18: Labor Markets

College graduates are paid more, on average, partly because the act of finishing college signals that they are more likely to be a good employee.

When customers drive discrimination, owners:

In which situation are you most likely to find discrimination?

Economic theory suggests that college graduates receive higher wages than those with only a high school education because:

Is there an incentive for businesses to make jobs safer for workers?

Some workers might prefer less safety and more pay than more safety and less pay.

The marginal product of labor is:

An individual's labor supply curve might be backward bending.

Discrimination by employers:

A firefighter is likely to earn ________ than a receptionist because ________.

Music is a relatively enjoyable profession, a factor that raises the wage for musicians.

The demand for plumbers is the same in country A and country B, but the plumbers in country A earn less than the plumbers in country B. What can explain this difference?

A firm will hire a worker whenever that worker's marginal product of labor is:

Which of the following is an example of discrimination?

If a business is greedy for profits, it is logically consistent for that business to also racially discriminate based on personal preference it might have.

One reason office cleaners in India earn less than office cleaners in the United States NOT because:

What is NOT a reason why are jobs safer today than they were some decades ago?

The introduction of fun into a job ______ labor ______.

Decreasing the marginal product of a firm's labor results in less labor being hired, all other things being equal.

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters

A firefighter is likely to earn than a receptionist because .

The introduction of fun into a job labor .